30 December,2019 07:08 AM IST | Mumbai | Faizan Khan
Joy Thomas
The Economic Offences Wing (EOW) of the Mumbai police, in its 32,000-page charge sheet filed on Friday, has revealed that apart from the heavy loan and over draft facility given to them, former MD Joy Thomas had opened a cash facility counter at the Punjab and Maharashtra Co-operative (PMC) Bank HQ only for HDIL officials.
Besides this special treatment, he had also strictly told the department concerned not to maintain a record of the cash given. However, some of the staff maintained records of the cash given to the Wadhawans, Waryam Singh, as well as the cash taken by Thomas, in three diaries. According to the charge sheet, the accounts department of the PMC Bank used to give cash to HDIL, and former chairman of the PMC Bank, Waryam Singh.
Thomas himself would take cash from the centralised cash vault of the bank. The managers who provided the cash, were specifically told by Thomas and joint general managers of the accounts department, to not maintain a record or make a formal entry in the account number of the centralised cash vault of the cash given to HDIL and that taken by Thomas and Waryam Singh.
PMC Bank account holders protest at Azad Maidan. File pic
Three books of records
As per the charge sheet, despite strict instructions from their bosses, these managers of the Accounts and Credit Departments maintained records of the payments given to Rakesh and Sarang Wadhawan, Waryam Singh and Thomas in three books.
After 2017, the managers were told to maintain a record of the cash and make proper entries. Employees of HDIL used to visit the PMC Bank's headquarters and collect cash on behalf of their promoters. The EOW has named the managers as witnesses in the case.
Manipulation of records
mid-day has earlier reported how the directors of PMC Bank, who have been arrested in the matter, would shelter behind the board of directors meeting, saying the HDIL loans were never discussed at these meetings and they were not aware of the financial irregularities taking place.
But the SIT of the EOW in its investigation has found that the minutes of the meetings were tampered with and the same was confirmed in the forensic audit report of PMC Bank. According to the charge sheet, minutes of multiple board meetings of PMC Bank are not available.
Charge sheet mentions
It is mentioned in the charge sheet that documents such as notices to board members for the meetings as well as the attendance register of the board of directors is not available. The charge sheet also says that pages are missing from the minutes of meetings. It was revealed that certain pages were manually removed and some were inserted in the minutes books. The pages added were not serially numbered.
The charge sheet also says that notices issued to the board of directors for meetings were unsigned. There was also a mismatch in the attendance register of the meeting vs the minutes. It was noted that the directors present in the meeting as per the minutes, were shown as absent as per the attendance register and vice versa. The charge sheet also noted discrepancies between details on sanction letters of HDIL and the minutes.
Rakesh Wadhawan: started banking with PMC in 1986-87 after it was established in 1984. The bank was rescued by Wadhawan on many occasions by providing capital. In 2004, the Wadhawans deposited a large amount to bail out the cash-strapped bank. Joy Thomas: was associated with the bank from the start and always remained under obligation to Rakesh Wadhawan and provided every possible financial support to him. Waryam Singh: was known to Rakesh Wadhawan since 1970. They were in college together, and started a land development project at Palghar. Singh was inducted in the PMC Bank board of directors to ensure prompt loans to HDIL. He was also a director in many HDIL group of companies. Surjit Singh Arora: is associated with PMC Bank since 1990 as one of the directors and runs a chain of hotels called Mini Punjab. Financial transactions were found between HDIL and Mini Punjab during the course of investigation.
According to the charge sheet, the fraud started in 2008 and from 2011 the HDIL group of companies started defaulting. But, PMC Bank did not show HDIL as a non-performing asset (NPA). The bank kept granting unsecured loans to HDIL and did evergreening of their loan accounts. Despite the default, officials of credit, audit and IT departments prepared forged records to conceal the real position of HDIL's loan liability. Bank officials were compelled to disclose the fraud after the whistleblower came into the picture. Instead of initiating legal proceedings, the directors kept conducting meetings with the Wadhawans to convince them to pay
their dues.
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